see you next week on an all-new episode of "open house nyc. heist, everybody. welcome to "on the money." i'm maria bartiromo. airlines and ketchup, the real deal with what they have in common. >> the state of our union is sfrong. >> is it really the president's address, what he said what he meant, and what it means for your money. and then one woman's remarkable journey from a captive of communism to a queen of capitalism. as a child, what was going through your mind? "on the money" begins right now. this is america's number one financial news program, "on the money." now, maria bartiromo. here's a look at what's making news as we head into a new week "on the money." will it be a marriage made in

airline heaven? announcing a $11 billion deal this week to create the world's largest airline. the new company will fly into the american name and will be one of the three major airlines in the united states. the ceo of the new company says there's not much room for further consolidation. >> it was 2005. there was like 11 airlines that at least 1% of the industry and now we're down to, you know, three large carriers which is intensely competitive. and southwest airlines, which did a fantastic job with low cost, and jetblue doing what they can do to make sure that low fares are out there. meanwhile, big deal from warren buffett. he wants to catch up on the deal front. his berkshire hathaway and private equity firm 3g capital will acquire heinz for $23 billion. the deal offers shareholders a premium of 20% over the recent stock price of heinz. the merger mania and deals deluxe had little effect on the markets though. the dow did toy with 14,000 again. during the week it stayed in a

tight range however. in earning s news, general motos lost and coke and pepsi blew past expectations. ceo john chambers told me europe is still a problem but government system overall was better this quarter. >> we did start to see government, however, around the world start to loosen up the purse strings a little bit. nothing to write home about, but in the u.s. as an example, stay and local government actually grew for us this quarter and federal was not down as much year over year as we've seen in prior quarters. >> and another sign of improvement in the housing market. the number of u.s. homes entering the folk process in january fell to a level not seen since the peak of the housing boom. down 11% from december but all is not well, says housing barren sam zell. >> everybody kind of has ignored the fact that there's still 3 to 4 million houses in purgatory. not for sale. not foreclosed. maybe occupied, maybe not

occupied. and you've got to address that. >> if you're looking for somebody who has done it all, look no further. he's with us. bob hormats is vice president of goldman sachs international. at the state department making the case for american companies overseas. bob, it's good to see you again. >> great to be back on your show. >> let me begin on sort of this front and center issue that we're all talking about and that is sequestration that this mandatory spending cuts that are going to take effect on march 1st, i realize we don't know what's going to happen. but what's the impact if sequestration happens? do you think the economy slows down? >> well, it will slow -- by all estimates, it will slow the economy down somewhat. there are differences among economists as to how much. but it will, of course, be contractionary and therefore it will slow growth, but there are a number of other things that are going on in economy that are pro-growth, so it will have a negative impact but there are other pro-growth elements which

can be very helpful. >> it sounds like you're not that worried. >> i am worried because it does cause concern that we can't agree on the kinds of rational policies to deal with our problems and we have to revert to something that no one really wants, but they can't reach an agreement on something positive to avoid this kind of thing. >> the good news is that this economy is growing, the u.s. economy. >> i think the u.s. economy is recovering. the job is recovering. the energy boom is helpful. the housing market has bottomed out and beginning to pick up. balance sheets, consumer balance sheetsz, business balance sheets are doing well and exports are doing well. >> how do we take that, the next step further? is it exports? open trade? >> i think there are -- all of these elms are important. from my point of view, the state department, exports are very important to the whole economy and to jobs because 95% of the world's consumer s live outside

of united states so we're promoting american exports and ensure there are fair trading rules in the global system so it's not distorted by state subsidies or state enterprises. we're also making a major effort through the partnership trade negotiations and now the president announced negotiations with europe. that can open up new markets and provide new opportunities for american companies and we're trying to attract foreign investment in the united states, which does create a lot of jobs here. >> let me ask you about energy. all i hear lately is about shale gas and the opportunity to create jobs in this country as a result of fracking, as a result of the opportunities around energy. i guess america is very rich in shale. >> we are very rich in shale and we're very rich in technology to tap into that shale. >> we're not using it. >> we have -- we're using it in larger and larger ams. what's happened in the united states is we have had a shale gas revolution already with more potential. the technology is good.

environmental standards are very high because the industry is making a major effort to ensure that there are no major mistakes that cause problems. so this will do two things. it creates a lot of jobs in this industry but it also lowers the cost of chemicals, it low weeere cost of gas, gasses backing out coal, backing out natural gas that we otherwise would import and otherwise increasing production of petroleum. we used to be dependent on imports of 60 percent of our petroleum and now 40%. potentially an exporter of natural gas, government regulations have to be worked out but we could be exporting natural gas if the right decisions are made to do that. the ams aamounts will obviously depend on certain decisions. no one would have imagined this ten years ago. >> exactly right. there were reports that american could become exporter of energy beginning in 2020. what about the naysayers who say

it's going to hurt the environment, fracking is going to get into the water? what's your take on this? >> it has to be done in an environmentally responsible way. the industry knows that. they don't want disasters. one major problem could set the whole thing back. the industry is very careful and the regulators are working closely with the industry this that environmental problem does have to be dealt with. if it can be dealt with, and most experts believe it can be, it unlocks an enormous potent l potential. it's really a technology that will change a lot of things, both in creating jobs and also enabling manufacturing to have a low-cost reliable source of energy and actual gas and also we can use it for power so we won't need to burn as much coal, we won't need to import natural gas, helps our balance of payment bs and by lowering the cost of energy, consumers will have more money in their pockets to spend on other things. >> what a job creator. it's got such potential. we're really seeing nenlg change the game in a number of these industries. energy included, because of

innovation. >> absolutely. energy is really a key target of technology, both in terms of production side but also there is a lot more efficiency in the corporate side and in households in the way we consume energy. there are new light bulbs, new building codes, new equipment that is energy efficient. >> is that where the innovation is in this country or is it elsewhere? is this country still number one in innovation? >> i think we're still number one in innovation. i talk to a lot of companies and american companies are innovative but there's more competition, so we have to continue to up our game, which means utilizing our energy, utilizing innovative technology, educational system needs to be a world class educational system if we're going to have world class xaeps and we need to build our infrastructure. other countries are doing that. we need to do likewise. >> good to see you. bob hormats joining us. up next, the state of the union and what the proposal president obama laid out in the

second term. later, the president brought up an eamericaing technology, 3d printing. >> new worker are masters the 3d printing. >> we'll talk to an innovator in that field and hear her remarkable personal and professional story. professional story. back in a moment.

let's do it without the brinks man ship that scares off investors. the greatest nation on earth, the greatest nation on earth cannot keep conducting its business by drifting from one manufacturing crisis to the next. we can't do it. >> president obama 66th minute state of the union address this week, the first in his second term. joining me now with analysis is tony t fratto. michael beschloss is a presidential historian. tony, let me kick it up with you. what do you think? can we get an economic policy

that doesn't stress consumers or scare investors, as the president said? >> it's hard. actually in this environment. talk to people about this all the time and try to help them understand what's going on here in washington. really our manufactured crises in a lot of ways but some of them are just structural to our system so, you know, the president talks a lot about republicans bringing things to the brink with things like the debt ceiling, which i've been very vocal about republicans should not try to have that fight on the debt ceiling. but we have a budgeting problem in washington where, you know, the senate can essentially just walk away from the game of doing a budget in washington. that's never happened before. and now it's happened three years in a row. so the only way this system can budget is to do it on these crisis points. >> we have a budget problem, michael. and president squarely addressed the middle class this week. did you find it effective? how much time does a second-term president really have to implement a domestic agenda? >> i think about six to eight months because what happens is, even lbj in '65 or fdr in '37, after the

enormous landslides, the two biggest congresses in the last 100 years, they knew if they waited longer than six to eight months, members of congress would be thinking about the next re-election. that he would always be a lame duck in the first year of his second term. so i think the president is right to act fast. >> so do you think that president's plans will actually move the nidle, change for the for the middle class in the next three years? tony, job creation, minimum wage, he wants it to go up, median wealth. the sequester should shave it this year. >> both parties share the same goals if you're talking about increasing employment, increasing wages, they just have very different ideas about how to get there and what set of economic policies will help americans the most. if we have divided politics and divided courses of action for how to get to those goals i'm not optimistic we can get there

unless we have a lot more debate about some of these very specific issues. >> we heard a lot of ideas from the president, michael. he talked about gun control, re-enforcing the manufacturing sector with higher technology production. he said all of this is not going to cost a dime. give us a historical perspective of the role of the state of the union in the terms of big notions, the president's accountability for these big ideas and, in fact, does it cost pony or will it actually not add to the deficit as the president promisees? >> well, to look at it misorically. 1981 ronald reagan came in with his budget program said this would reduce the deficit even though we were cutting taxes and increasing defense spending. turned out to be the highest deficits of that time in history. but, looking back, i'm glad he spent that money because that money was spent to end the cold war. had we been a little bit more careful about that that would have hant. we got over the deficits in ten years. oddly enough, if you look at it

with a longer view, these things look different. >> it keeps as if we're trying to re-elections. now the dems want to take the house back. they're moving aggressively to make sure the republicans seek control of the house of representatives in 2014. do we just keep going from cliff to cliff so that everybody can win re-election? >> as michael knows the history on a lot of these elections, midterm elections even better than i do. and i think -- i know democrats may want to do that. i think republicans are really in a good place actually for the mid-term elections. you know, democrats have a lot of seats to defend in the senate. and republicans frankly did a very good job, you know, protecting their districts the last couple of census redistricting efforts. so they're in a strong place. but, you know, we still have to find a way to get both of these parties to work together on some of issues. some of it is only going to happen in the course of brinksmanship. i do think there were two areas

that the president mentioned that came out of the state of the union address, maria, that maybe there might be some bipartisan ground on and i think both could be really good for the country. one is which people have been paying a lot of t attention to is immigration reform. the other which no one has been paying much attention to and hopefully they will now is on trade and the announcement -- trying to do u.s./eu free trade agreement. i think that's really good news, coupled with what we're maybe trying to do in asia. that's at least a little bit of pro-growth common ground that both parties can try to tackle together. >> gentlemen, great to have you on the program. thanks so much. we will be watching many of these ideas manifest in the coming years. see you soon. tony t fratto, michael beschloss joining us. up next "on the money," over came china's cultural revolution to become a star of america's

our entrepreneurs born or made? my next guest tells a remarkable story of innovation. she remade her own life, surviving a difficult youth in mao's china and american technology pioneer. king few is author of the memoir "bend not break." ping, great to have you on the program. thanks for joining us. >> so pleased to be here, maria. >> the memoir is actually a page

turner. we were so looking forward to ha having you. it's been quite a journey. beginning with being sent to a labor camp at age 8 where you cared for your younger sister and suffered significant abuse. tell us a bit about what it was like during china's cultural revolution. children being taken from their parents to be re-educated. can you bring us into that a bit? >> yeah. it started in 1966 when mao said we didn't need academic education. we need to learn from farmers, worker, and soldiers. so all of us got -- in the school age, didn't go to school. and the country turned into chaos. there was red guards, which are teenagers going house to house ripping your things apart, beating people, killing people. just complete chaos. >> how did you get away from that? and when, if you did, reunite

with family, what happened in terms of reuniting with your parents? >> my father was away for 12 years, so he only came back when i went to college, after cultural revolution was over. my mom came back when i was 13, and it was rather difficult reunion because she was tortured and not in a good mood. i was just coming into teenagerhood and i just learned how to be dependent. and i didn't get along with her very much at that time. >> but when you say you went to college, i mean, that was a huge thing. how did you get away? what led you to college? >> after cultural revolution ended, china reopened the university. so for ten years there was no university. i passed exam to get into college. i was known taas the girl who never turned the light off. but i didn't have a choice of what to study. i wanted to be a astronaut and

to study chinese literature. >> how fascinating. i guess the key question here is, how did this life experience change you? what can you tell us in terms of the impact all of this has had and how did it turn you into an entrepreneur? >> well, ironically, much of the skill set that i learned having this particular life journey prepared me to be an entrepreneur. for example, i have over-developed skill of self learning, dealing with difficulties, problem solving, the power of endurancendurance,o the ability to change. those are all the characteristics that's needed for being an entrepreneur. >> and your 15-year-old company has now aided the creation of so many important things, from braces to prosthetic limbs, even space ships. talk to us about it. how does 3d technology work? >> geo metrics technology starts

with imaging the real world and real people in three dimension, rather than pictures that are projected to a flat plan, we take pictures around an object so you get 3d digital model. nasa's case, we scanned the image of insulated tile and then we create repair, that's idea call shape of the damage. this data gets sent up to space station and they cut it out with the repair and the spacewalker can go out, fit it in, seal it, and then the damage is repaired. >> and we've got some props on the desk. tell me about what you brought us today. >> okay. so this is a 3d printed shoe and we're experimenting the art, which is a mesh of many object. the material, lighter weight with a lot of empty spaces. in the heel, and then also it is molded to the shape of my feet

so it's completely custom made. >> ping, good to have you on the program. thank you so much. up next, the coming news in the upcoming week that will be have impact "on the money." and is the city of new york city takeout in jeopardy? may michael bloomberg's list of banned substances as we take a break. look at how the stock market ended the week. back in a moment. look at how th market ended the week. back in a moment. look at how th market ended the week. back in a moment. , look at how market ended the week. back in a moment.

more on our show and our guests, check out the website otm.cnbc.com. follow me on twitter and google plus, look for me at mari mariabartiromo. monday is president's day. stock market and banks are closed for the holiday. following that, earnings are out from walmart, hewlett-packard and dell computer. that could be the company's last earnings release before going private, that's dell. wednesday we'll find out the number of new residential units that began construction last month, as well as what happened behind closed doors a t the last meeting of the federal reserve open market committee, the minutes of that meeting are out on wednesday. on thursday, the existing homes sold over the last monday. and finally today is the way we to go about to be gone? styrofoam is the new public enemy of the mayor of new york. he an nowed this week his attention to ban the

nonrecyclable foam packaging. typically used in to go containers. about 20,000 tons of styrofoam are thrown into the big apple's waste system every year. the mayor has already targeted sugar, salt, and soda in the nation's largest city. and he plans a significant environmental push for his last year in office. mayor bloomberg insists the doggy bag and the coffee cup will be just fine. that will do it for us for today. thank you so much for joining me. each week keep it right here where we are "on the money." have a great week, everybody. i'll see you again next weekend.